Big Company Acquired the Following Assets and Liabilities of Little

question 35

Multiple Choice

Big Company acquired the following assets and liabilities of Little Company (fair values listed below) for $470,000 cash.

Assuming these items are all recorded at their acquisition date fair values,what additional item needs to be recorded and how will it be accounted for in the future?

• A) $30,000 Goodwill, capitalized and tested for impairment
• B) $30,000 Bargain purchase, recognized in current earnings
• C) $30,000 Bargain purchase, capitalized and recognized over time
• D) $30,000 Goodwill, capitalized and amortized over time

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Definitions:

Personal Computers

Electronic devices that are used by individuals for various tasks such as word processing, internet browsing, and gaming, distinct from larger systems intended for communal use or professional data centers.

Web-Based Tool

An application or software that is accessible over the internet and helps users perform specific tasks online.

Internet Cloud

A metaphor for the global network of remote servers hosted on the Internet to store, manage, and process data, rather than on local servers or personal computers.

Lackadaisical Attitude

An unenthusiastic or carelessly lazy approach towards activities or responsibilities.